E278: What Separates the Top 1% of GPs

What if the most powerful investment strategy isn’t optimization but making one truly great decision each year? In this episode, I talk with Joshua Browder, Founder and CEO of DoNotPay and a solo pre-pre-seed investor, about how momentum, conviction, and first-belief investing create outsize outcomes. Joshua shares how DoNotPay became a profitable, dividend-paying AI consumer company with a team of 14, why he focuses on backing founders before they look credentialed, and how acting decisively on binary choices can matter more than years of incremental improvement. We also explore why grit beats IQ, how momentum keeps startups alive, and what it really takes to be a founder’s first believer.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Weisburd?

  Joshua, I've been very excited to chat. Welcome to the How to Invest Podcast.

• 0:03Speaker 01

  Thank you so much for having me.

• 0:04David Weisburd?

  So tell me where Do Not Pay sits as a business today.

• 0:08Speaker 01

  So Do Not Pay has been around for a while. I like to think of Do Not Pay as an AI consumer champion. And what I mean by that is we've helped millions of people fight back against big companies and the government. The very first use case 10 years ago, I started it as a freshman in college, was helping people get out of parking ticket. And today, we have over 100 areas of consumer issues that we help people with, such as getting people refunds, cancelling subscriptions, all of the areas where big companies know that people don't have the time to fight back. So Do Not Pay is a subscription business. Consumers pay us on a monthly basis and then they get access to all of our services. And we have hundreds of thousands of customers and it's a very small team of only 14 people at this point.

• 0:49Speaker 01

  We are venture backed, so it's a Series B company, but given the scale of the business and the efficiency, we're actually profitable. So about a year and a half ago, we started doing dividends for our shareholders and we were one of the first VC-backed companies to do that. And interestingly, one of my friends in Silicon Valley said, "A company like Google would never pay a dividend. You shouldn't pay a dividend." And we paid our dividend and actually, I think a few months later, Google paid their first ever dividend. So very exciting and I still run it every day and I also do a lot of exciting investing, which I'm excited to discuss with you.

• 1:23David Weisburd?

  When we last chatted, you said that a company should exist to make money, which sounds extremely non-controversial. But in reality, see venture capital plowing billions of dollars into companies before they get profitable, to your point. Google just recently started paying dividends. Why do you have this paradoxical belief? And isn't that in friction of growth and market share and all these other things that startups should ascertain?

• 1:47Speaker 01

  I arrived in the US in Stanford in 2015 and at that time Snapchat was the big winner and the big inspiration for everyone. And of course, we all watch the social network. And so all of these social media companies kind of perpetuated this myth that it's okay for companies to continually lose money for a long period of time. And then you saw Uber and other companies like that do the same. I think really it is a myth because Facebook at the Series A was profitable. And a lot of the best businesses actually do. And I'm seeing this now with companies that I was the kind of first believer in that are now doing quite well. They're actually great businesses. And so I think it's more of a myth than people realize about whether you should be losing too much money. And it's best to have a good business.

• 2:31David Weisburd?

  What about network effects and economies of scale and all these things that you're supposed to gain as a venture backed startup? Which is the reason you lose money as you're gaining these scale economies?

• 2:41Speaker 01

  I think that for network effects, particularly with social networks and marketplaces, it makes sense to go a little longer with kind of scaling. For kind of enterprise software businesses, at least on a kind of gross profit basis, they should be profitable.

• 2:56David Weisburd?

  You're also a solo GP investing out of your fourth fund at Rudder Capital. Tell me about the story of how you became a venture capitalist.

• 3:03Speaker 01

  So I started my business by accident because I got a lot of parking tickets and I similarly became an investor by accident. So three and a half years into Stanford, I took a program called the Teal Fellowship where they. I'm sure many of your listeners are familiar with the Teal Fellowship, but the summary is that they pay top 1% young entrepreneurs between the ages of, say, 16 and 22. It used to be $100,000, now it's $200,000 to take a two-year break from college and start a business. And I'd already started my company Do Not Pay, but it was more of a project during college and I wanted to make it a serious business. And so three and a half years into college, I took the Teal Fellowship. And for me, it was transformational because I was really surprised. It was my dream to go to a place like Stanford from the UK.

• 3:48Speaker 01

  I grew up watching the Stanford YouTube videos on iOS app development. But I got there and actually a lot of my classmates wanted to go work at Google and Facebook. And now I have some family members there and they tell me now they want to be in like private equity and VCs. And so even a very entrepreneurial place like Stanford, there weren't that many people that I could turn to with issues that I was having with starting my business. And the kind of question I always have is, how do you convince a 35-year-old to work for you as a 19-year-old? And how do you do that?

• 4:21Speaker 01

  Well, it all comes down to aligning their goals with the company's goals.

• 4:25David Weisburd?

  So they're not working for you, they're working for the company?

• 4:28Speaker 01

  Yeah, so and everyone has different goals. So and you have to change your recruiting pit to base on the candidate's goals. So if it's a 21 year old fresh college graduate, it should be all about their personal growth and how the company will help them. If it's someone who's a bit older, it should be about stability and all of the kind of the company will be around in five years and all of that stuff. Anyway, going back to the Teal Fellowship. So I found these amazing 19 other people in my class of Teal Fellows who could give me advice on these very issues. And I thought, this is truly amazing. I want to get more involved. And I was very lucky because at the time, they were looking for people to help select the next year's class. Peter Teal is an amazing entrepreneur and investor, but he's very busy. And so they have this tradition with the Teal Fellowship that every

• 5:13Speaker 01

  year, the current fellows help select the new ones. And they're on the ground as entrepreneurs, so they can kind of tell what's real and what's not. So in 2019, I started interviewing future Teal Fellows to help decide the next year's class. And so I did all these interviews. I probably interviewed close to 100 people that year. So it's like these 10 minute back to back interviews. And there was one person that I interviewed that instantly struck me, struck out to me as as one of the top people I've ever met, both in the interview process and perhaps in my journey so far. And that was someone called Adam Gil. And I was instantly convinced that he was going to do incredible things. And at the time, he had just incorporated his business a few weeks earlier. And I knew that he was going

• 5:58Speaker 01

  to do good things. And I thought, I have to get involved in some way. And so he was living in LA at the time, I was based in San Francisco. And so I invited him and he slept on the floor of my office, just because he needed a place to stay when he was coming to the city. And I took him to Yonami Burger, which is a burger restaurant in downtown San Francisco. And I said, I really want to get involved with what you're doing. Is there any possibility that I can invest? And he said, yes, I'm doing my first ever round of fundraising in the kind of pre-prec seed. If you're in, I'd love to have you. And the problem was I didn't have any money at the time to invest. My company wasn't paying dividends yet. This was before the scout fund mania that you see in the VC land today. But I did have one source of money, which is that when you win the Teal Fellowship, as I mentioned,

• 6:43Speaker 01

  that they give you the hundred K and that just hit my bank account. And so I thought this is the most fitting use of the prize money to empty my bank account and invest it in him in the pre-prec seed. So I put it all into him and now the company is worth over a billion dollars. So I thought this is going so well, I should keep this going. And so I decided to raise funds and I've kept that strategy of being the first believer to people who are more eligible to the market than than me, because I'm a founder and entrepreneur on the ground and be their first believer and go all out to help them. And then they become more obvious later on.

• 7:13David Weisburd?

  What mistake did you make on your thesis on investing in Adam? And what did you guess correctly?

• 7:19Speaker 01

  I could never have imagined. I've only had a positive experience because it's gone well so far. You can never imagine just how big someone will become. And today it publicly discloses a kind of unicorn company. But I think one day it could be the sky is the limit. And so my biggest mistake was he has exceeded even my own wildest expectations. And what's gone well so far is is obviously the investment. Even that investment alone, I have this investment philosophy that life really comes down to one big decision a year. And that investment alone is enough to retire just personally. But obviously I keep doing this because I love it. And how can I make more decisions, big, big decisions like that?

• 8:00Speaker 01

  Because it was a kind of gutsy move at the time to empty out all my savings to put it into this this guy.

• 8:06David Weisburd?

  Tell me more about this. One decision a year is what what's important. How do you distill that? How do you act on it? And what makes you feel that that's true?

• 8:15Speaker 01

  People spend too much time over optimizing for the 5% on the margins. Can I be like 5% better here? And they spend so much time thinking about that, but really the best decisions are binary. Should I have invested in Bitcoin in 2015? Should I have done the owner investment? Should I do all this type of stuff? Should I start my fund? And those are the decisions that really count. And so I try and always take a step back and think about. I should spend more time on binary decisions versus optimization style decisions when investing. And that's really what pushed me to start my fund, actually. That in and of itself is an interesting story. There was an investor, there was another company I invested in that did quite well with my own money.

• 8:54Speaker 01

  As you may know, when safes convert, all of the investors in a company get kind of this disclosure about the round kind of converting. And you can see who invested when and how much. And there was an investor that was coming into the downstream round. He saw my kind of thing on the schedule of purchases that I got into this other company quite early, in any case. And he said to me, wow, you're going into this really early. If you're ever, I would love for you to kind of show me more of these, please, you know, I want to come and invest with you. And I said, and I was doing a phone call with him and I just decided at that split second. I said, well, I'm starting a fund. If you're interested, I'd love to have you as my LP. There was no kind of just even thought of a fund before this phone call. I decided on the phone call and he said, well, I'm in.

• 9:38Speaker 01

  I'd love to invest 200K in your first fund. And that's how I got started with my fund. So that was another decision where it's just a split second moment that kind of changed my trajectory.

• 9:47David Weisburd?

  So interesting. I hear what you're saying. At the same time, I wonder how almost these impulsive decisions, what kind of hit rate you have on that? And how do you marry making these kind of impulsive or in the moment decisions with good thought process and good rationale?

• 10:03Speaker 01

  I would say you kind of look for the upside in someone. And so my business model with my fund is really being the first believer to people that aren't credentialed. And you might think, well, that's Teal Fellows. And I do see a lot of Teal Fellows because I still interview them to this day. A perspective, Teal Fellows sometimes make even better investments because they're earlier. But now the Teal Fellowship is the establishment. And oftentimes the entrepreneurs I get, I back, become Teal Fellows later. And it becomes this kind of post facto narrative. But really, I'm trying to back people that I believe will do amazing things and they have the skills to do that. But they really tick none of the boxes that even the young people funds look for. And I like to have the saying, it's better to create your own momentum than chase the hype of others.

• 10:48Speaker 01

  And so I think about when I'm deciding to invest. Person, these people, how can I bend the world to make it a success versus is it going to be a success or not? And that can involve various different things to create momentum. Oftentimes, they're not from San Francisco. So I say, move into my spare bedroom, move to SF. I joke with them that their valuation doubles the second they move to San Francisco, which is probably true. If they're not even a US citizen, I I say, well, the O one visa for extraordinary people exists. Let me put your visa on my personal credit card as a gift. Let's get you the O one visa and just get them in their momentum thing. And I say to the entrepreneurs, it's your job to build the product. It's my job to help with everything else. And so for me, it's not really about a prediction decision. It's about can I push them in the right direction?

• 11:28David Weisburd?

  It's almost an operationalization of Dan Gross's pioneer.

• 11:32Speaker 01

  That's right. I would say the difference is there's a lot more depth. Um, it's a one person accelerator. So I go all in on one person at a time and then they get momentum. And then I get them the institutional seed. Someone comes in and takes moral responsibility for the company and I move on to the next one. It's like Y of one. And because of the one person, it's a lot more depth than any potential accelerator. I mean, Y C now is like hundreds of people every year. And there's a lot of dilution on terms of the effort and and there's only so much that they can do for you. But with me, I I go all in and I and the people I introduce them to, I say, this is my one. You should really meet him. And I only have one spare bedroom as well.

• 12:10David Weisburd?

  So yeah, forced constraint. You're meeting these people so early, just to give context. You're meeting them pre-accelerators. It's literally, I think, probably some of the times they don't even have incorporated company. Are you looking just for IQ and grit? Are those the two variables or what other variables are there?

• 12:26Speaker 01

  I IQ, I think, is overrated. So there's this myth now that that these Olympic math medalists in high school make amazing founders and has so many resources from a lot of different funds. If only we can have someone on every college campus to just get these Olympic math medalists. And there's this myth that there's like these special people who are just born special. And they're just so special that you just have to catch them. I I think IQ is important. You definitely want above average. They know how they need to know how to play the game and build their business. But what you said about grit is much more important. Being an entrepreneur, and I can speak about my own kind of experiences, like eating glass some days. It's it's like amazing other days, but some days, of course, there is always the temptation to give up. And unless they truly have a connection to the problem and have some sort of chip on their shoulder

• 13:11Speaker 01

  that they can't give up, then they're going to give up and it will be a bad investment. And so one of the things that struck me about Adam Guild. Was he originally started owner.com for his mother. His mothers had a dog walking business that was destroyed in the pandemic. And he started it because she needed to get online. She couldn't, people wouldn't just show up for the physical dog walking business anymore. And he was the difference in making it between a failure and a success. So his mother could afford her livelihood. And that is the type of kind of chip on the shoulder mission that I look for. This is not right to Alan, but maybe other ones that maybe have something they really want to prove in their childhood or or something like that where they won't give up.

• 13:55Speaker 01

  And actually, if I index all of the people that I've met over the past 10 years, including people I've interviewed, thousands of prospective Tiel fellows, literally over a thousand now over six years, and friends from the Bay Area, friends from Stanford. I can't tell you a single person that if they were earnest and they never gave up, they didn't achieve some level of success. Now, of course, it varies, but.

• 14:15David Weisburd?

  And at least, and you're saying not only on that company, but within a decade post. Or are you saying specifically on that company? One thing that I've learned from talking to hundreds of investors, founders and business leaders is that planning for the future isn't just about growing assets. It's also about protecting the people who matter most. Life comes with a lot of important milestones. Maybe you're buying a home, starting a family, planning for college, or simply thinking more intentionally about your financial future. As those responsibilities grow, it's worth making sure you protect those you love. Not sure what kind of life insurance you may need? Concerned about how much it may cost? Think life insurance is too complicated? Your local State Farm agent can help answer those questions. They can help you explore your options for life insurance and choose coverage that you can adjust as your family's needs change over time.

• 14:59David Weisburd?

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• 15:07Speaker 01

  No, I think the next company or something, they achieve some level of success. And typically with a company, it's a surprisingly high hit rate if it truly is their life's work. So the number one thing I look for is, is it their life's work? And do they have a chip on their shoulder to never give up? And then beyond that. A lot of people ask me, how do I pick? And I have this quote from the Supreme Court. You know it when you see it. And I think it was related to pornography. And so you can't exactly quantify what it is. But there's some general heuristics, which is that I look for a top 1% skill that they've exhibited during their kind of teenage years that make them demonstrate like extraordinary ability to execute. And different generations of entrepreneurs have different ways to prove this.

• 15:50Speaker 01

  So I started coding around age 12. So this was in the kind of early 2000s, 2010 style era. And back then, the most exciting thing in 2010 to 2013 was gel breaking. So like selling themes for gel broken iPhones and software on the Citi App Store, which is the unofficial app store and things like that. Then the next generation, maybe like Adam Gil's generation. And there's an entrepreneur called John Andrew, who was his first investor with Wanda. They really focus on Minecraft service. And you would see with, actually with both of them, they were making in some instances, six figures every month renting out Minecraft service. Then the next generation was like WAP, W H O P, which is now publicly disclosed to be close to a billion dollar company. I think it's 800 million.

• 16:34Speaker 01

  They were doing sneaker bots, so bots to snag sneakers before everyone else. Now you're in the Roblox generation. And actually, maybe the joke is we've skipped all of this intermediate stuff. Maybe there are 13 year olds on X now who actually have serious M R R for SaaS products. So maybe now they don't even do anything in between. They just go straight to SaaS.

• 16:54David Weisburd?

  And there is not that they have an idea. It's that they're able to take an idea from beginning to execution to money in the bank. That entire lifecycle shows that grit, shows that innovation, shows a lot of the traits that'll make them successful as an entrepreneur.

• 17:08Speaker 01

  And I look for them being exceptional in something. So that can be engineering. I was lucky to back the first engineer, sorry, the youngest engineer at Amazon when he was 16. And obviously he's a top 1% engineer for his age, in my opinion. But it can also be distribution, like the WAP founders or Adam Gil, who have more experience breaking through the noise in a, in a very crowded world. And that can sometimes be even more important.

• 17:29David Weisburd?

  Yeah. Peter Thiel now calls himself a distribution maximalist.

• 17:32Speaker 01

  Yes.

• 17:33David Weisburd?

  Last time we chatted, you said that startups are momentum machines. What did you mean by that?

• 17:38Speaker 01

  So at the pre-precise, when the company is on life support and it incorporated a week ago, there's only three reasons why I think they fail. And it's very simple. They run out of money, they run out of hope, or co-founder disputes. Co-founder disputes can be managed, or YC has done a very good job about educating the ecosystem or investing and things like that. So I'm less worried about that. And you can kind of tell if they hate each other, at least initially. Running out of money is also not really an issue at my stage of investing because I give them kind of enough speed that they typically almost always raise some downstream funds. It's the running out of hope that's the biggest thing. And so the number one thing that I do for the entrepreneurs I back is every week I want them to feel like they're making serious progress.

• 18:22Speaker 01

  And it builds over time and it's like an escalator of momentum and credibility. The first step on the escalator can even be they decide what the name of the company. If they get a top tier name and domain name, that's a great first step. Then they build their product, getting kind of a test version of their product out and then getting their first customers. And then it becomes a snowball where they make their first hires, they raise more money, they raise more money. And one day they become a unicorn and then, and they have 300 people working there. And the snowball is just going so fast down the mountain, it can't be stopped. And so I really think it's all about momentum. And when I'm evaluating, I'm like, can I give them enough momentum to make it a big outcome?

• 19:00David Weisburd?

  How does the role of the founder change pre and post momentum? Is it fundamentally different role?

• 19:05Speaker 01

  Yes, and I saw this with my own journey with Do Not Pay. Pre momentum, you want a kind of product expert, someone who's solving a real problem and amazing with the product. And that's a very important skill to have even throughout the lifecycle of the company. Like Dylan Field is still in the weeds with Figma and he's making an amazing product today. But after kind of you have the product, it becomes much more about building an organization. Can you hire a lot of people? Can you raise a lot of money? Do you know the exact things to say to investors? And people kind of have to scale themselves to building an organization.

• 19:38David Weisburd?

  Do you believe that the founder should always be at the helm of CEO and these founder-driven startups as they scale? Or do you think there's a room for Sheryl Sandberg in certain situations, the COO? And how does one know?

• 19:51Speaker 01

  I think if the founder's heart is in it, they are always the best person running the company, at least nominally as CEO. The question is, if their heart is not in it, then of course, if the jockey, there's an expression, if the jockey is not interested in riding the horse, then the horse should get a new jockey. So it's up to the founder. I think that if the founder truly, they believe it's their life's work, they should always be running their company. So it's up to them. But of course, if they don't want to do that, then someone else can come in. I think when someone else comes in, it's kind of a salvage situation. You're kind of picking up scraps. And so it's best to focus on the ones where there is this true alignment. So whatever the founder wants, really.

• 20:29David Weisburd?

  That's kind of the linear Tim Cook to Steve Jobs, where Steve Jobs created this compounding machine and Tim Cook is the professional manager that could only do so much. There's no asymmetry left in the company.

• 20:40Speaker 01

  Yeah, but there are counter examples like Uber, I think, has done very well. Although that's controversial, I guess, in my circles.

• 20:46David Weisburd?

  Microsoft as well.

• 20:48Speaker 01

  Yes, there's a lot of people who kind of read a lot of books and like study the public markets and apply those to their day to day operations. For me, it's just about, you know, moving them out of my spare bedroom and getting them the seed round so that they can be a success. And I'm really a tactical thinker on a day to day level.

• 21:04David Weisburd?

  You've brought up this concept of founders doing their life's work. Distill that into a couple of examples. Give me a sense for what that even means.

• 21:12Speaker 01

  There's an entrepreneur I backed, who their family is from California and they were impacted by the fires and insurance and things like that. And they started an incredible insurance company to automate insurance based on their personal experience, something like that. So it can be from their family. It can be from their life experience. For me, I'm the type of person to wait on hold for four hours to save $20. So I miss a do not pay. And I look for that level of connection with the people I back. And there's two things. So it's connection to the problem and that's important. And then connection to wanting to build a big outcome. And that can be for a variety of reasons. Maybe they hate their sibling and they just want to like do more than their sibling. There's all sorts of reasons people want to build something big. And I don't mind what the reason is.

• 21:58Speaker 01

  I'd say maybe their parents weren't that nice to them. Who knows? But they have to have like this delusional sense of never wanting to give up, plus a deep connection to the problem.

• 22:07David Weisburd?

  I need this ego attachment to winning. How do you suss that out in interviews? And when you're diligencing a startup, how do you figure out that psychoanalytical aspect of a founder?

• 22:18Speaker 01

  So I think the reason people like me to do interviews is because I'm very cynical and I can catch all of the things that other people don't catch. And so when I interview, I have not just your fellowship, I interviewed for other programs as well and help out my friends with their different programs and events. And someone might have all the credentials, so they went to a top school and they even have a top VC firm that back them and they have all of the they worked at. They went to a top school, they work for a top company, they have a top VC firm that back them. And I go through everything and I think that they're not real. And it's the little things that you kind of pick up on. And so it could be to do with work ethic.

• 23:00Speaker 01

  So when I meet an entrepreneur, I say, let's meet, let's meet at 10pm tonight. Like at 10pm this Saturday and they'll say, well, how about on Tuesday? And it takes like a week to even schedule this. And so, and then you meet them and it's like, I go through the product. And if they're post-launch, sometimes these entrepreneurs, they do actually have a few thousand in monthly revenue. I say, show me your metrics. And they say, I don't have that on my phone. What type of serious entrepreneur doesn't have the Stripe app on their phone? So the best ones, they just know it, that they like go through everything, like know every detail. And it's really about their attention to detail and their work ethic. And you can kind of build up signals with kind of what they're doing.

• 23:39David Weisburd?

  Said another way, it wouldn't disqualify them from being a middle management employee at a Fortune 500 companies. But it's disqualifying when you're trying to be a founder, you need that edge.

• 23:49Speaker 01

  Yeah, and I back first time founders. And so sometimes they can be 28 or they can be 18. It's not like this age, that's another thing everyone gets wrong about young founders. They think it's about the age, really it's about the grit of being a first time founder. And the reason is, if you back an 18 year old high school dropout, the first thing they'll do is they'll build the product and they'll get customers. If you back a 10 year old middle manager, that they've been a middle manager at Google for 10 years, the first thing they'll do is they'll hire 10 people and those 10 people will probably hire five people each as well. And it'll be an endless scheme of hiring. And so it's really about the first time kind of grit and hustle with low lifestyle burn.

• 24:27David Weisburd?

  You invest, I think you called it pre-prec seed. I don't know if that's a technical term that you use, but pre-prec seed. How do you think about portfolio construction? How does that differ from, say, a seed, seed fund or a series A fund or other types of funds?

• 24:41Speaker 01

  Every fund, I want to get better. So, and I'll go through my journey and how this led to what I want to do with my fourth fund. So my first fund was 2.5 million and it was really just about finding smart people I know and giving them 100K. There was no portfolio construction or anything like that. And it was really just heel fellows and my classmates at Stanford. My second fund, I said, I want to diversify the deal flow. I want to build kind of these embedded networks beyond heel fellowship and Stanford. And I started hosting my own events and getting really ingrained with different communities. My third fund, I said, okay, I'm going to start focusing on ownership now. My second fund was only 7.5 million. And so if I did 100K into a great outcome, it would more than return the fund and I wouldn't have to worry about that. And I saw that actually with Prepared.

• 25:23Speaker 01

  It was my first kind of BPI exit where I put 5% of the fund, 350K, quite a small check. And it returned more than half of the invested capital of the fund when they sold to Haxon for 800 million a few weeks ago. But my third fund, thank you. My third fund, I said, I'm going to really start focusing on ownership because that was a 13 million fund. So I started really trying to get 5% plus ownership into the company I was investing in. And I really did two types of investments in my third fund. I did these like 110K at 2.2 style investments. I was buying like 5% of the company for 100K. And then the second one, second type of investment I made was like reserve style investments where like I put in 15% of the committed capital of my third fund into owner at the series A,

• 26:07Speaker 01

  which was a great investment because it's now a unicorn. But I realized that the opportunity cost of reserves is huge. That is like 20 precedes and.

• 26:21Speaker 01

  So I realized that the value creation on the precedes side is so high that I should spend all of my time doing these like super first believer style checks. And so for my fourth fund, I have no reserves. The average entry price across the entire fund so far, six months in is five million evaluation. And I, I, I think that that's really the way to go. You either want to be really big platform like Thrive or A16Z and kind of double down when things are obvious, or you want to be kind of bay of incorporation in the trenches. But there's no real room in between in this market. And so that's why I set the strategy I have set.

• 26:57David Weisburd?

  I keep on thinking about this thing that you said, the one decision per year that matters. You seem to really have this distilled into a practice. How, how do you go about looking for these decisions? How do you go about knowing that it's one of these potential decisions? And how do you practically apply that principle to your life?

• 27:12Speaker 01

  I could do a lot better job. I say this on a podcast that is about one decision a year, but I get like most of us, I get caught up in the weeds every day. And so I, I, I try and take a step back and I, I ask all the entrepreneurs I back. And when I interview them, I say, what are your goals? Next three months, six months, one year. And so I try and do this for myself. I try and set quarterly goals, both in terms of business and in terms of life as well. And I think having intentionality around one's goals is really good. And I'll tell you one thing on, on the kind of entertainment side, I have a really good friend and every quarter we say, we want to do one really unique life experience. And we set like a big quarterly goal for that. So I think setting goals is really important because it allows you to take a step back.

• 27:56David Weisburd?

  Two podcasts that really changed how I think about things fundamentally. One is Ryan Hoover, Product Hunt. I don't know if you know him, great guy. And also more importantly, great thinker. And he thinks of everything like products, shockingly. And he tries not to do things that are just processes, something that takes like 45 minutes. If he's doing it four or five times a week, he'll create a product on it, some kind of script or something to productize it to save the space. Cause I think one of the things that stays, that gets in the way of doing these big things is the, the, the short-term task, these highly urgent, highly non-important tasks that keep on compiling. And I think. Coming up with these ideas and some of these ideas on what the next big thing itself

• 28:37David Weisburd?

  needs to be done in a state of having energy and on a clear mind. There's a Chinese proverb, you cannot fill your cup until it is open. And then the second one, Dave Fontan from HF0. So they've productized this ability for their startups that go through their incubator to really go into monk mode and focus all their time and energy on solving their number one task. And the way that Dave explained on my podcast with him is Sam Altman is very good at this. So Sam Altman was on an interview and he was asked, how do you go about allocating your compute between Sora, ChatGPT and other products? And he said, well, actually, that's a micro optimization. I focus all my time on how do I get more compute? And then he corrected himself

• 29:22David Weisburd?

  and he said, well, actually, now I'm more focused on energy policy because energy policy is what's going to bring more compute, which is going to help allocate the compute. So it's not even, the reason I love that example so much, it's not that actually the optimization is a trivial thing. It's probably 20, 30% compute could be optimized. It's that he's focusing on the number one thing. And the way that Dave puts it is the number one thing keeping businesses from solving their number one problem is their number two problem. It's not these like number 15 problems, which most people could see as distractions. It's the most important thing in the business, except the most important thing in the business. And I've been thinking a lot about this and just the way that our brains are wired not to really focus on these power law decisions and how to go about it operationalizing. So I'm also trying to

• 30:06David Weisburd?

  operationalize that into my life as well.

• 30:08Speaker 01

  I'm a big fan of what Dave is doing with HF0. And it's interesting. You mentioned that example about choosing which model because one of HF0's biggest wins is Open Router, which does exactly that. So actually makes the decision for people. But on the other hand, okay, the counter argument is you have to, so the goal is important to be big, but you do have to think tactically. So maybe the goal for me when I first invested in Adam was I want to kind of be the first believer into these incredible companies and build a fund and all of this stuff. But the tactic is every day there should be these small steps. So I think it's okay to think small if it's tactically, but the number one goal should be overarching.

• 30:43David Weisburd?

  You truly have to start every day from first principles, which is what is the most important thing? Sometimes it's writing an email because you need that meeting. Sometimes it's the most short-term thing that seems highly unscalable. And sometimes it's sitting back and spending 20 hours coding on a script. They'll save you 20 hours in the next month or whatever that is. They'll save you 200 hours in the next year. There is no necessarily operationalizing principle that you could apply to every single situation, but it's so important to remember that even between the number one most important thing and the second most important thing, sometimes there's a gap of 100x and it's counterintuitive. On that note, this has been an absolute masterclass on pre-precede. I learned a new term today and how to build those businesses, how to build a profitable

• 31:28David Weisburd?

  venture-scale business that distributes dividends, which blows my mind as well. Thanks so much, Asher, and looking forward to continuing this conversation live.

• 31:35Speaker 01

  Thank you so much.

• 31:36David Weisburd?

  That's it for today's episode of How I Invest. If this conversation gave you new insights or ideas, do me a quick favor. Share it with one person in your network who'd find it valuable or leave a short review wherever you listen. This helps more investors discover the show and keeps us bringing you these conversations week after week.